Strategic Acquisition Enhances Porch’s Early Access to Homebuyers and Adds Expected $15 Million in Recurring B2B SaaS Revenue to 2022
Porch Group, Inc., a leading vertical software and InsurTech company reinventing the home services industry, today announced the acquisition of Floify, a leading provider of digital mortgage automation and point-of-sale software for mortgage companies and loan officers. The acquisition continues Porch’s strategy of providing software to companies involved in key moments of the homebuying process and expands its early access to high-intent homebuyers who need key services including insurance, warranty and moving services.
Floify Acquisition Overview
Based in Boulder, Colorado, Floify helps mortgage companies and loan officers create a better mortgage and refinancing experience for their customers. Floify’s digital mortgage automation and point-of-sale software streamlines the loan origination process by providing a secure application, communication, and document portal between mortgage lenders, borrowers, real estate agents, and other mortgage stakeholders. Loan officers use Floify to collect and verify borrower documentation, track loan progress, communicate with borrowers and real estate agents, and close loans faster. During 2021, Floify has helped these loan officers process on average 77,000 mortgage applications each month.
Strategic Rationale
- History of strong operational and financial performance. Floify has grown its annual recurring revenue (ARR) by 72% CAGR since Q1 2017. With more than 1500 companies currently using its software, Floify saw 130% annual net revenue retention as of Q2 2021 and expects $15 million of revenue in 2022. Floify is a profitable business, growing rapidly, with an expanding base of satisfied SMB and enterprise company clients. Virtually all of Floify’s revenues are recurring B2B software fees. Floify is anticipated to operate at similar margins to Porch’s overall business and is expected to contribute $2 million in revenue to Porch for the balance of 2021 post-close.
- Provides Porch entry to the mortgage origination market through best-in-class software: Floify’s flexible solution helps mortgage companies and loan officers deliver a simplified process to borrowers. For Porch, adding relationships with mortgage companies in addition to those with home inspectors, title companies, and moving companies, is an important step in Porch being able to simplify home purchasing and moving.
- Enhances Porch’s early access to homebuyers. Floify’s access to borrowers at the start of the mortgage application provides Porch an early introduction to high-intent homebuyers in need of other home related services. Approximately 70% of Floify’s transactions in 2021 were from home purchases. Porch plans to expand the Floify offerings to help mortgage companies provide an even better homebuying experience for their customers by assisting with additional services for their new home, including insurance, home warranty, moving, TV/internet, and more. This transactional revenue layered on top of Floify’s solid and growing SaaS fees, is expected to help Floify further improve its already strong 10.5x LTV/CAC as of the first half of 2021 and thus allow for continued investments in profitable growth.
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“Floify has an impressive presence and unique position in the mortgage origination software business,” said Matt Ehrlichman, Porch founder, Chairman and CEO. “There are very few companies providing software to loan officers to help improve the borrower experience, and we are excited for Porch to now be one of the major players in this vertical. We look forward to investing to further to help Floify customers stand apart by making the home purchasing and moving process easier for homebuyers. With this acquisition, Porch now has a leadership position in providing software to most of the key fragmented home services industries where companies work with homebuyers at key moments in the home journey.”
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